Due Diligence for Global Deal Making: The Definitive Guide to Cross-Border Mergers and Acquisitions, Joint Ventures, Financings, and Strategic Alliances
Due Diligence for Global Deal Making is an invaluable guidebook for companies trying to capitalize on the opportunities in both developed and emerging cross-border markets. All too often global transactions fail to meet the parties' expectations, and the leading culprit is inadequate due diligence. Especially when the target partner lacks a financial performance track record and significant assets, expanding businesses must answer difficult questions, such as: Why (if at all) do this deal? What are the rules going in, and what happens if things go wrong? Where are the tax, legal, financial, and operational traps, and what are the opportunities? This book provides what’s needed to avoid devastating mistakes and to master the steps that ensure success:
- Expert analysis, insights, and strategies from experienced practitioners and leading authorities in cross-border matters
- In-depth coverage of critical topics decision makers need to understand in order to succeed in cross-border transactions--from corporate planning to operational, financial, legal, tax, accounting, and people/organizational considerations
- Best practices of corporate investors and professional advisers in conducting critical due diligence
Noted experts discuss critical topics corporate executives--and all those involved with their company's legal, operational, accounting, and tax matters--need to know to successfully complete complex global transactions today.
Chapter 1: Due Diligence in the Global Economy (Arthur
What Is Due Diligence?
Types of Due Diligence.
Who Is Involved in Due Diligence?
What Constitutes Legal Due Diligence?
What Constitutes Financial Due Diligence?
What Constitutes Operational Due Diligence?
Integrating Due Diligence Efforts.
Chapter 2: Strategic Due Diligence (Geoff Cullinan and
Strategy Precedes Due Diligence.
Reviewing Your Strategy.
Factoring in Cross-Border Complexities.
Identifying Your Strategic Rationale.
Undertaking Thorough Due Diligence.
Industry Dynamics and Trends.
Competitor Market Map.
Competitor Dynamics .
Customer Analysis, Input Costs, and Price Elasticity.
Key Factors in Evaluating Strategic Rationales.
Due Diligence for Scale-Driven Transactions.
Due Diligence for Adjacency-Driven Transactions.
Due Diligence for Scope-Driven Transactions.
Due Diligence for Transformation-Driven Transactions.
Assessing Your Findings.
Checklist: Cross-Border Strategic Due Diligence.
Chapter 3: Operational Due Diligence (Linda D.
Arrington, Nelson M. Fraiman, Carolyn E.C. Paris, and Michael L.
Operational Due Diligence in the Cross-Border Context.
Designing Due Diligence from a Strategic Perspective.
Validating and Integrating Other Due Diligence Efforts.
Serving as the Foundation for the Integration Plan.
Serving in Support of Deal Strategy and Pricing.
What Should Operational Due Diligence Cover?
Mapping the Value-Creation Process.
Products and Services, Market Positioning and Brand, Sales and Distribution, and Customers.
Manufacturing or Other Production of Goods/Services.
Procurement of Supplies and Supply-Chain Management: Possible Related Reconfiguration of Distribution Processes, External Infrastructure Requirements, and System Cash Needs.
Systems and Know-How Support of the Value-Creation Process.
People, Training, and Corporate Culture.
What Can Go Wrong.
Deals That Got It Right.
Checklist: Cross-Border Operational Due Diligence.
Chapter 4: Financial and Accounting Due Diligence
(Jorge M. Diaz).
Addressing All Aspects--Whether Large or Small.
Financial Due Diligence Procedures.
How to Verify the Numbers.
Outbound Transactions in Developed Countries.
Outbound Transactions in Emerging Markets.
Accounting Due Diligence Procedures.
Integrity and Qualifications of Company Personnel, Their Practices, and Ethical Standards.
Relationship with Independent Certified Public Accountants.
Considerations in Evaluating Key Accounting Issues.
Statutory, Regulatory, and Legal Requirements.
Industry Accepted and Generally Accepted Accounting Principles.
Income Tax Laws and Regulations.
Data Processing Systems.
Political Environment in the Target's Country Checklist: Cross-Border Financial and Accounting Due Diligence.
Chapter 5: Legal Due Diligence (Norman J. Resnicow,
Esq. and Clifford A. Rathkopf, Esq.).
"Legalese" across Borders.
The Purpose of Legal Due Diligence: Insurance against the Unknown.
A Good Deal Is Vastly Better Than a Good Lawsuit.
Defensive Due Diligence in U.S. Public Securities Issuance.
Transactions: Proving Enough Was Done.
Forces Working to Limit Due Diligence: Quick Decision Makers versus Slow Scriveners.
Avoiding Ruffled Feathers and Missed Opportunities.
Fitting Due Diligence into the Structure and Timing of the Deal: Sooner Is Better.
Organizing and Executing Legal Due Diligence: The Buck Stops at the Top.
Assigning Qualified Personnel.
Organizing and Delegating Duties.
Ensuring a Searching Investigation.
Communicating Results Effectively.
Certain Key Risk Exposure Areas in Legal Due Diligence.
National Security Implications.
Security Interests of Creditors.
Terminating Employment and Marketing Relationships.
The Preferred Result of Legal Due Diligence: No News Is Good News.
Checklist: Cross-Border Legal Due Diligence.
Chapter 6: Tax Due Diligence (Robert T. Bossart,
Compliance versus Planning.
Due Diligence Coordination.
Local, National, and International Perspective.
A Word about Joint Ventures.
Taxable Purchase of Assets.
Understanding the Target’s Operations and Structure.
International Federal Tax Compliance Due Diligence.
Foreign Subsidiary Shares as Part of the Target’s Assets.
Nonfederal Tax Due Diligence in an Asset Acquisition.
Asset Acquisition Planning Opportunities: Overview.
Taxable Share Purchases.
Transactions and Tax Reserves.
Consolidated Returns, Attributes, and Accounting Methods.
Foreign Tax Credits and Exemptions.
Structuring the Share Acquisition.
Checklist: Cross-Border Tax Due Diligence.
Chapter 7: People and Organizational Due Diligence
(Cynthia N. Wood, PhD and Richard C. Porter).
Type of Deal.
Composition of the Organizational Due Diligence Team.
Impact of Organizational Experience and Cultural Milieu.
Key Components of Organizational Due Diligence.
Organizational Performance Measures.
Mission, Vision, and Values.
Communications Patterns and Processes.
Overall Organizational Structure.
Checklist: Cross-Border Organizational Due Diligence Process.
Chapter 8: Due Diligence Investigative Technology and
Know-How (James B. Mintz).
How Investors Use Private Investigators.
How Investigative Technology Can Help.
The International Public Record.
The Hometown Newspaper.
The Backgrounds of Key Executives.
Prime Questions Investigators Must Explore.
Resolution through Follow-up Investigation.
The Business Practices of the Target Company.
Concerns about Intellectual Property.
Increased Pressure on Due Diligence Professionals.
Checklist: Due Diligence Investigative Technology and Know-How.
Appendix: Cross-Border Due Diligence in an Age of International Terrorism.
—Vladimir Kvint, PhD
Professor of Management Systems and International Business, Fordham University
Author, The Global Emerging Market in Transition
Contributing Editor, Forbes Global magazine
"This is a timely book that brings back the commonsense, in
addition to the applied forensics, approach to due diligence.
In light of recent dramatic due-diligence failures, deal
participants need to make sure they fully understand the company
that is undergoing a corporate transaction. Due-diligence issues
are often exacerbated in cross-border deals, making this book's
global focus very relevant."
—James H. Zukin
Senior Managing Director, Houlihan Lokey Howard & Zukin Capital
"Thoughtful due diligence has never been more important in deal
making, and this book gives you all the tools to get the job done.
It also goes beyond diligence to clarify strategy and long-term
objectives. It's a critical business reference."
Chief Operating Officer, Thayer Capital Partners
Author, Buyout: The Insider's Guide to Buying Your Own Company